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Kevin Martin, the chairman of the Federal Communications
Commission, has announced a plan that will regulate the early termination fees
that wireless carriers charge their subscribers when they want to give up a
contract.
Over the last few years there have been numerous complaints
from people who have been charged fees amounting from $150 to $200 when they
announced their mobile phone providers that they wanted to cancel their
contracts with them. Advocacy groups think that this sort of policy forces
people into keeping a contract with a company they would normally leave.
If Martin’s plan will be adopted, people will still have to
pay an early termination fee, but this time its value will vary depending on
the price of the phone that has been bought by the subscriber when he or she
closed the contract with the carrier. What is more, the longer the subscriber
will remain in the network, the less he should pay when he chooses to change
the wireless carrier.
The plan is a step forward in protecting subscribers from
deals that would not benefit them, but there is the perception that there is
more that can be done. Analysts think that cell phone providers might even fare
better if they drop the fee, given the fact that this industry has seen some of
the largest numbers of consumer complaints, many of them regarding their early
termination policy.
While companies state that the early termination fees are
necessary in order for them to be able to subsidize the cost of the phones they
offer and to cover the cost of signing in new customers to their services,
analysts estimate that these values combined amount are under $50 compared to
the $150 they charge.
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